This is my second post on New Year’s resolutions, with this one focused on how to improve your finances.

Many people choose to have spending and saving goals for the new year. This is wise, because if you don’t maintain some sort of financial plan or target, your random daily spending decisions during the course of the year will likely cause your money to flow through your hands like water. At the end of the year you will have saved nothing, or worse, accumulated even more debt.

Here are some thoughts on how you can change your relationship with money, which I hope will help you achieve a financial goal you might choose.

You Can Always Spend It

Sometimes when I tell a friend that I am going to pass up making a purchase, such as for some luxury item, they remark, “Oh, you should just buy it! Why save the money?” My thought process is that I can always still spend the money. The money isn’t going anywhere. It’s not an irreversible decision. If I decide at some later point I want to spend the money on that item, or something else, then I still can.

Just the past couple of months I was thinking about buying a new watch. I really like this Special Operations military watch made by a company called MTM. Its costs about $800, which is more than I would usually spend on a watch. I decided to just put off buying it for a while.

Since then, my precious dog, Munson, passed away, which was horribly painful. I loved him so, so much. Now I want to buy another beautiful Bichon, so I’m glad I didn’t buy the watch. A much better use of my money came along. And if it hadn’t, I still probably wouldn’t have bought the silly watch—I would have just saved the money.

The Enjoyment of Purchases is Fleeting

My wife and I plan to replace her 2004 Lexus SUV with the 2016 model. Our plan is to wait and buy a used one with a few miles on it in a year or two. Compared to buying new we will probably save about $10,000, since new vehicles depreciate so quickly.

I was at a Lexus dealer the other day, looking at the new 2016 model we want, and it occurred to me how easy it would be to just buy a brand new one right then and there, with exactly the options we want. It would be simple to justify: I have the money, and we deserve it, right? But I didn’t. The reason I didn’t is because I know that the enjoyment of any purchase is very fleeting. So why overspend on a brand new vehicle, when the small amount of joy that this purchase affords is so short-lived? I decided to just stick with what was already a good plan, to buy a used one in a year or two and save the ten grand.

The Value of A Good Night’s Sleep

I have often marveled at how easy it is to spend money. I don’t care how much you have, you can spend it all in a matter of days or weeks. Let’s say you’re lucky enough to be a newly minted NBA player who just signed a $10 million contract. You could easily choose to go out and buy a mansion for yourself, and one for your mother; purchase a couple of exotic vehicles; lend your brother-in-law a couple hundred thousand for that business idea he has; and poof, the money’s all gone!

At some point each of us has to decide to live at, below, or above our means. Everyone has to make this basic decision. There is no avoiding it.

Elaine and I long ago decided that sleeping well, as a result of being financially prudent, is more important than whatever luxury crap we would buy if we were to choose to live above our means. What good is a Corvette in the driveway if we have to worry about a correction in the stock market causing us to have to worry about where we can afford to live? No thanks. We’ll choose the good night’s sleep. You might also consider the value of peace of mind as compared to whatever purchases you think will make you happier.

I hope this discussion has given you some useful perspectives on any New Year’s resolutions you might choose related to your money and finances. Be in charge of your finances: your money should work for you, not the other way around!

TIM MCINTYRE retired in 2004 from his position as president of Applied Systems after facilitating a successful sale of the company. At only forty-six years old, he made the unusual decision to fully retire to pursue other interests and simply enjoy free time. As a hard-driving Type A personality, this turned out to be a significant challenge for the Notre Dame and University of Chicago-educated MBA, CPA, and Certified Cash Manager.

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